Digicel Group has issued a new restructuring plan intended to cut its debt burden by as much as US$1.7 billion.
If the plan is approved, the Irish-owned, Jamaica-headquartered operator hopes to reduce its debt to around US$5.3 billion by exchanging its current liabilities for lower value securities.
A newly created company, Digicel 0.5 (DGL0.5) - which will act as a holding company for the group’s operations across Asia-Pacific, the Caribbean, and Latin America – will issue the bonds. If they remain outstanding after three years, they can be converted into a 49% stake in DLG0.5.
A statement from the group read: “Despite many years of significant investment in its world-class networks and infrastructure and solid underlying performances across its markets, Digicel’s current debt levels remain high. Digicel has indicated for some time its commitment to reducing its debt to more sustainable levels and the tender offers and consent solicitations are a key step in that process.”
As well as cutting its debt, Digicel stated that the restructuring programme would also “reduce its annual cash interest payments by approximately USD130 million and extend its maturities, which will provide increased liquidity and flexibility to access additional liquidity during the next year.”
